Ending the ITW tie-up and cutting to fifteen core products (2002)

Returning the borrowed technology, taking back the customers

The 1967 venture was a transaction that gave up the breadth of the market in exchange for technology. Under those terms Nifco became the domestic leader and listed on the first section of the Tokyo Stock Exchange. The constraint only registered as a cost once Japanese vehicle demand stopped growing — and the 1996 purchases outside the industry were what a company unable to widen its market did instead, hunting for other earnings at home. Dissolving the tie-up ran in the opposite direction from diversification: it was a move to take back the core business’s own customers.

What the company paid to undo it was the can-beverage packaging business and the greater part of a product range that had run to several hundred items. The line of diversification once described as “¥8bn a year from new fields within five years” was replaced here by concentration on automotive components. The customers of KTS, the German company Nifco bought in April 2013, were Volkswagen, BMW and Daimler. Under the 1979 contract, every one of them sat on ground where Nifco was not permitted to sell.